Becoming a landlord of a rental property can be overwhelming, with numerous decisions to make, from finding the right tenants to handling repairs. Here are some common mistakes made by new landlords:
1. Not Running a Background Check
One of the most common and costly mistakes made by new landlords is failing to run a background check. Even if a tenant seems great and has the full deposit amount on hand, it’s essential to run a credit check and criminal history check. This helps ensure that the tenant will be reliable and responsible, reducing the risk of problems down the line.
2. Not Budgeting for Vacancies
Failing to budget for vacancies can be a costly oversight. When purchasing a rental property, it's crucial to set aside funds to cover any potential vacancies. Even if you have prospective tenants lined up, it’s wise to have extra money reserved for unexpected vacancies or gaps between tenants.
3. Putting Off Maintenance or Underestimating Costs
Neglecting maintenance or underestimating repair costs can lead to bigger, more expensive problems down the road. Staying on top of maintenance requests and addressing issues promptly is key to keeping tenants happy and preventing larger issues from arising. Be sure to budget for regular maintenance and seek multiple estimates from contractors or handymen to get a realistic idea of repair costs.
4. Should You Hire a Property Manager?
If you’re unsure about all the responsibilities involved in owning a rental property, hiring a property manager can be a smart move. Property managers can handle tenant screening and selection, ensuring you have reliable tenants in your rental property. They can also help minimize vacancies, keeping your revenue stream more consistent. In addition, property managers take care of maintenance requests, gather estimates, and schedule repairs with contractors, saving you time and effort. Hiring a property manager can be a valuable investment in the long run.
